What's in a “Name”? Impact of Use of Customer Information in E-Mail Advertisements

Sunil Wattal (), Rahul Telang, Tridas Mukhopadhyay () and Peter Boatwright ()
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Sunil Wattal: Fox School of Business, Temple University, Philadelphia, Pennsylvania 19122
Tridas Mukhopadhyay: Tepper School of Business, Carnegie Mellon University, Pittsburgh, Pennsylvania 15213
Peter Boatwright: Tepper School of Business, Carnegie Mellon University, Pittsburgh, Pennsylvania 15213

Information Systems Research, 2012, vol. 23, issue 3-part-1, 679-697

Abstract: In this study, we examine how consumers respond to firms' use of two types of information for personalization: product preferences and name. We collect a unique data set of over 10 million e-mail advertisements sent by a website to over 600,000 customers who could buy the advertised products from the online merchant. We estimate a two-stage hierarchical model using Bayesian analysis to account for observable and unobservable consumer heterogeneity. Our analysis suggests several interesting results regarding consumers' responses to firms' use of information. When firms use product-based personalization (where the use of information is not explicitly mentioned), consumers respond positively. On the other hand, consumers respond negatively when firms are explicit in their use of personally identifiable information (i.e., a personalized greeting). We also find that negative responses to personalized greetings are moderated by consumers' familiarity with firms. The main contribution of this study is that it not only indicates the economic benefits of personalization in e-mails but also highlights consumers' concerns over the use of information in personalization.

Keywords: personalization; privacy; information use; hierarchical Bayesian model (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:orisre:v:23:y:2012:i:3-part-1:p:679-697

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